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Successful Leadership and Motivation Lead to Employee Satisfaction

Mirela Kljajić-Dervić
University of Bihać, Bosnia and Herzegovina
mirela.kljajic-dervic@unibi.ba, mirelakd@yahoo.com

Šemsudin Dervić
European University of Brčko district, Bosnia and Herzegovina
semsudin.dervic@yahoo.com

Abstract. The success of the entire business depends on the most important resource of any
organization which is certainly human resources. They are creators and makers of new technical,
technological and organizational solutions, creators of new values, controllers of working process and
development of business systems. The key question is: who will manage human resources and
motivate them so that the whole organization performs better. Leadership is one influence, one work
of art and the process of impact on people, in sense that those who are affected are voluntarily and
willingly participating in the creation of new values in the organization. Precisely, the role of a leader
is to motivate its co-workers to their potential contribution in achieving the objectives of the
organization. Leadership and motivation are key factors influencing the success of the organization, as
well as employee satisfaction. Therefore, the connection and interconnection of successful leadership
and proper ways of motivating employees are essential for all organizations. Seeking the answer to the
question why companies in Bosnia and Herzegovina are lagging behind in their success and why there
is an outflow of workforce or what motivates employees for greater personal satisfaction and a better
contribution to the organization, we have created a questionnaire and interviewed employees in
different companies. In this paper, we seek an answer to the question how can we, with successful
leadership and motivation, increase employee satisfaction and business success of the organization.

Keywords: leadership, motivation, management, human resources management, employee satisfaction

1. Introduction

The dominant problem today is the issue of human resources and motivation for work. At the
beginning it is important to determine the key factors that affect the success of the company and the
employees’ satisfaction; because we don’t only have to create new knowledge in the enterprise, we
have to especially encourage human resources to share their knowledge and experience with others
(Yeh, Ali in Ho 2006). Human opportunities and knowledge, because they are undoubtedly great, are
no longer in focus as much as motivating and encouraging constructive change of these opportunities
in the function of achieving organizational objectives and development.

Employee motivation is a very important process. Unfortunately, many leaders do not understand the
concepts, principles and mechanisms of motivation (Hauser, 2014).

Robbins (2001) and Daft (1994) define leadership as the ability to influence the group of people for
goal achievement. Schermerhorn (1999) states that leadership is also one out of four functions which
represent management process. „ Leadership is the process of other co-workers, to work firmly in
order to execute, complete, and fulfill important work tasks “.

This is why the question often arising is how to successfully lead and motivate employees.

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Question often arising is how to motivate employees and therefore how to contribute to better
enterprise functioning. Motivation is a key for high standards of business, for fostering creativity,
creativity and innovation, for professional development of employees and for their retention in the
enterprise.

The question of motivation refers to determining the factors and reasons that direct human behavior.
With motivation employees' behavior is seeking to be influenced, they are encouraged to make the
best efforts in performing their work tasks. Motivation responds to the question of why someone
behaves in a certain way, why some employees are more committed, making more effort and
achieving greater performance than others. Understanding the motivation and behavior of employees
enables managers to adequately plan actions for guiding employee behavior towards achieving the
desired organizational objectives.

Valuing work and rewarding the employees’ and managers’ performance is crucial for the short-term,
long-term and project effectiveness of each enterprise. Human resource management and development
becomes increasingly important due to the new place and role of human in all social processes as well
as in their management.

Reliable employees who are satisfied with their job are prepared to make greater efforts and to
perform more efficiently their work tasks. Rizwan & Mukhatar (2014) state that employees’
satisfaction plays a key role in evaluating the success of the organization. The overwhelming
satisfaction of employees is crucially important because it is crucial for the business success of each
organization. This is a basic need for companies to understand what employees want. Therefore,
exploring and to identifying areas of motivation became activities of high importance for enterprise
management. People are different and have different needs, interests and desires; each employee has
their own set of motivators and incentives. Their knowledge enables managers to build an adequate
reward system that will motivate employees and direct their behavior towards the successful
achievement of the organizational objectives as well as the individual goals of the employees.

Employee satisfaction is an integral part of the work quality within all organizations because based on
attitudes of employees their behavior and their satisfaction, depends how they will do their job which
has a direct impact on the organization's performance and success.

2. Management, administration and leadership

Management, administration and leadership are often used as synonyms although there are primary
differences. Management can be defined as a work process with others and with the help of others in
achieving organizational objectives in a changing environment with effective and efficient use of
limited resources. In the context, management comprises five (5) functions and leadership is one of it.
Because of that, in this context, leadership is narrower term than management, i.e. as part (function) of
management.

Professional literature on leadership is very comprehensive and by examining a number of scientific


and professional literatures a unique definition is hard to find. There are a lot of reasons for it. First
reason, out of two significant reasons, is that the management is being taught by experts from different
scientific areas and disciplines. And another important reason lies in the complexity of the leadership
phenomena (Kovac, Mayeer and Jesenko, 2004).

The purpose of leadership is to shape knowledge of individuals and groups with communication and
support in order to cooperate in achieving organizational goals. The leader must know himself and

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others well enough to influence the knowledge of the subordinates and together with them to meet the
set of goals. The counseling, informing, assessing and developing co-workers is also considered within
the framework of leadership. In doing so, we need to be careful about the enthusiasm, relationship,
culture, work and the knowledge within the organization.

Luthans (2002) concludes that it is „significant to interpret leadership as an expression for a specific
theoretical process that causes change “. Rozman (2002) expresses leadership as a result of one of the
management functions; management exercise planned organization.

As we can see, definitions of leadership are different. Based on the definitions given we can quote
Rozman (2000) which states that „ the definition of leadership differs only in the details “ and that
leadership is the process of influence on others in order to achieve goals that are set by the leader”.

Leadership is a significant aspect of managing. Leadership represents the process of influencing


people in order to achieve the organizational objectives. The essence of leadership is followership. In
other words, it is the willingness of people to follow that makes person a leader. Leadership is a
managerial function that implies certain activities and effects on the people in order for them to
contribute to group goals and the organizational goals. In this context, leadership comprises four
groups of activities: leadership, - motivation of employee, -interpersonal processes, groups and
conflicts, - and communication. Therefore, managers need to possess the ability to understand
individual human personality. The manager's job is not to manipulate people but to recognize what
motivates them.

It is important for the organization to have managers as leaders, as the basic precondition for designing
and realizing leadership management.

Figure 1: Leadership management

Source: Baroš, 2005.

Leadership is the process of leaders’ influence on other people with the appropriate leadership style,
motivation of loyal members and followers in an appropriate environment and situation with the
purpose of achieving the organizational set of goals in a given situation, where each manager is leader
while each manager is not a leader at the same time. Leadership implies the ability to inspire people
and create enthusiasm and creative atmosphere, with participation in the creation and realization of the
vision, mission, goals and tasks of the corporation (Baroš, 2005). In respect to it, it is very important
that the leader knows how to choose the right rewarding system for his or her employees, which will
inspire employees and encourage them for better and more productive work that will result in
company’s better performance as well as greater competitive advantage in the market.

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Table 1: Differences between management and leadership
Management Leadership
Implements leader’s vision and changes Articulates organizational vision and introduces
introduced by the leader, maintains the large changes in the organization, encourages co-
organizational infrastructure. workers, works in stressful situations of the
external environment.
Focus on the tasks (things) through managerial Focus on interpersonal relationships, humans,
functions of planning, organizing and control. leadership management function.
Planning, setting detailed goals and actions for Establishes guidelines, develops vision and
accomplishment. strategies for result accomplishment.
Organizing and recruiting the staff. Setting the Innovates and allows employees to perform job in
organizational structure in order for employees to a way that they want for so long while results are
perform their task in the way that manager wants. in line with the vision.
Controlling/Follows results and compares it with Motivates and encourages employees to
plans and takes concrete actions. creatively create a vision.
Predictability/Planning, organizing in consistent Provides innovative and faster changes that are
way. Prefers stability. not predictable easily / Prefer a change.
Managers to the things in the right way. Leaders do the right things.
The accent is on stability and control. The accent is on change, empowerment and
authorization, cooperation, on people and
diversity.
The accent is on short-term dimension, avoidance The accent is on the long-term dimension, taking
of risk, maintenance and behavior. risks, innovating and creating new ideas.
Activities focused on organizational goals The basic of leadership is to lead, because
accomplishment. without a lead there is no leadership.
Process of coordinating factors for the purpose of With leadership it is a human factor that holds a
achieving the organizational goals. group of people together and directs them toward
the goal.
Process of planning, organizing, human resources Influence, behavior, personality
management, leadership and control.
Broader term. Narrower term.
Task oriented. Oriented to the people and relationships among
them.
Dealing with procedures and results. Oriented toward interactions among the people.
Process of getting things done. Process of determining the direction of change
and motivating people to change.
Deals with realizing the complexity. Deals with realizing the changes
Refers to the position an individual takes in the The position that an individual takes in the
organization. organization is not important for leadership
Key process whose function produces results. Process whose function is a change.
Source: Bahtijarević-Šiber, F., Pološki-Vokić, N., Sikavica, P., 2008.

3. Motivation to work

One of the important management tasks is to support employees to work more and better, and
motivation plays an important role within. Business successes of the company or organization cannot
be achieved without employees who are devoted to their work. Managers must take care about
employees' motivation all the time and they must use appropriate motivation tools or mechanisms.
Only when a motivational mechanism connects the business and individual goals of an individual to
his or her individual needs; the use of the same is effective (Svetic, 2010).

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Author Svetic (2010) the author presents several factors that enable effective employees’ motivation.
For the employees, especially those who are focused on goals and strive to achieve high performance,
new working challenges have to be always assured. In such a way, employees can show their
competencies and personal growth. It is also very important to involve employees in the process of
reciprocal work. It has been proven that the employees involved in such decision-making are better
motivated to work. For employees it must be enabled to use all their knowledge and skills to prove.
The next step is getting to know the purpose, which affects employee motivation. With proper
communication, employees are familiar with the company's goal and vision. It is necessary to
emphasize the importance of direct, two-way communication between the employees and the
management of the company which enables the management to verify if the employees correctly
understood the received information. The introduction of team work is the next factor, which has a
motivating effect on employees. Employees who are part of the team feel affiliated with the group and
are better motivated to work. Employees are better motivated in the case when their reward is linked to
the performance, having in mind that the employee's contribution is measurable and accurately
defined.

Motivation in the organization of a company is the outburst or the existence of a reason for provoking
the will or willingness to work and work performance (Economic lexicon, 1975).

The Need-Want-Satisfaction chain. Motivation can be seen as a chain reaction: the needs we feel lead
to the wants or goals we strive which causes tension (i.e. unfulfilled demands) that leads to the actions
for achieving the goals that ultimately result in satisfaction.

Figure 2: The Need-Want-Satisfaction chain

Source: Koontz, H., Weihrich, H., 1994.

When motivating it is necessary to try to meet the different needs of employees, so that they are
satisfied, happy and far from the tension. This creates a pleasant environment, in which employees are
far more focused on work, have more interest and desire for work, and consequently perform their
work more effectively. Motivation is a technique for making business attractive. The motivation
process is permanent, constant and useful for both the employer and the employee. This is crucial for
improving performance of employees (Gaurav, 2010).

4. Reward systems

People work in the organization to meet the needs they have, which means that they work in order to
receive a certain prize (salary) at the end of a certain period, which motivates and supports the work
activity. Workers must be rewarded materially and immaterially for their work. The main work
supports are certainly material rewards (especially money). Money plays an important role in the

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motivational structure of the company, but its power is limited, because it only works moderately on
large changes in wage and payments related to the work results. We cannot ignore non-material
rewards, because these awards can even motivate workers more from material rewards (for example,
promotion at the workplace). Certainly each individual is different depending which reward (material
or non-material) motivates better and which less.

Which reward system will be chosen by the company, depends on the company itself and its goals. It
is significant that the company supports the execution of a business strategy based on the reward
system, because today rewarding workers is one of the main psychological work simulators. The big
question arising is how to influence the employee, with what prize to reward it; how to motivate him
or her best to do his job good and efficient.

Purpose and significance of rewarding


Reward systems are designed and guided to achieve certain goals. These goals can be defined as
general and specific. The tasks of the general goals are to increase the efficiency of the work and the
commitment of the employees in order to improve the business process and improve the company’s
business results. These goals are primarily focused on attracting, retaining and motivating the quality
staff required in the company. It does not only refer to managers and top experts but also it refers to
the people with different degrees and educational profiles, as well as managers at the middle and lower
levels. Rewarding specific goals are divided into areas that it includes, and so we can talk about
organizational goals, individual employees’ goals and the goals of the trade unions.

The organizational objectives of the reward system must meet the company’s specific needs, but also
it must ensure adaptation to changes in the turbulent environment. They should be designed to ensure
the staff needed, rewards for performance and improvement of further contributions, achievement of a
satisfactory degree of fairness, flexible implementation of the reward system, simplicity of the reward
system, the effectiveness of the reward system and the implementation of laws and regulations.

The term rewarding and motivating are interrelated. According to Lipovec, their connection is shown
in the following relation. Human needs, awards as part of corporate management responsibility, the
awarding mechanism requires action which is determined by work assignments and duties and reward
can be achieved with them, and the mechanism for determining the normal effect are the main
elements of the deliberately set psychological mechanism motivation. The same psychological
mechanism of motivation is transformed into purposely motivational relationship between the worker
and his needs and the employer which defines responsibility and thus the rewards (Lipovec, 1987).

When a company develops a reward system or salary structure the question arising is how to motivate
employees the best to increase their job efforts in the company. In terms of this, two possibilities are
known and that is a traditional and alternative reward system (Prasnikar, 1992). With traditional
reward system certain standards have been developed. Within this standard the cash prize for an
individual is very important and for the increased financial support individual will respond with
increased effort. Alternative reward system is important to base on objective performance
measurement, by which the effect of an individual in a smaller group of employees or in the whole can
be determined, and on the basis of that workers must be awarded. This system supports the diversity
and competitive behavior of the company.

The main goal of the desired reward system is to support the implementation of the company’s
business strategy and thus contribute to the success and competitiveness of the enterprises (Zupan,
2001). In order for the reward system to adequately support the implementation of the company’s
strategy, it has to meet four requirements (Zupan, 2001). The first requirement is that the reward
system should contribute to greater efficiency and success of employees. The next requirement is that

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reward system has to be fair for everyone within the organization; for employees and for the company.
The third requirement that rewarding system needs to meet is that an expert must work within the
limits planned. And the last requirement is that the system must comply with current legal norms.

5. Job satisfaction

One of the main elements in human resources management is measuring employee satisfaction,
whereby organizations must ensure that employees are highly satisfied because it is a requirement for
increasing productivity, responsiveness, quality, and attitudes towards parties. The success of each
organization is indissolubly linked to employee satisfaction, which is equated with the organization
and the preservation of those gifted employees (Sageer et al., 2012). Satisfied employees can launch a
chain of positive steps, which can have a great impact on improving the organizational work (Heskett,
Jones, Loveman, Sasser J., & Schlesinger, 1994). Employees satisfaction is positively related to
motivation, dedication, organizational behavior, belonging, productivity and has a positive impact on
satisfaction with life and social health (Judge & Hulin, 1993).

Employee satisfaction is usually described as satisfaction or well-being, which the employee receives
obased on his or her work. Employee satisfaction is recognized as one of the most important factors
affecting the quality of services rendered, productivity and loyalty of employees. Satisfied workers
work better, they are better motivated and have higher moral (Sharma, Kong & Kingshott, 2016).

Employee satisfaction is not just a goal for itself but it is also happy worker is a productive worker.
Job satisfaction can affect the level of commitment, fluctuation and financial earnings of the
organization, as well as it can affect the level of performance, the readiness of employees to engage in
problem-solving activities, and the intensity of effort that worker makes.

6. Empirical research

The research was conducted in companies from Bosnia and Herzegovina in the period from October to
December 2016. The research involved employees of companies from different industries and
different sizes.

In order to examine the motivation and satisfaction of the employees with their job, a questionnaire
was designed and developed for this purpose. Respondents' full anonymity was ensured in this
research conducted. The respondents were not obliged to sign the questionnaires and after completion
the questionnaire were deposited in the special box prepared. The first part of the questionnaire was
aimed at collecting socio-demographic variables of the respondents / employees (age, gender and
qualification). The second part of the questionnaire contained 14 questions. The questions aimed at
measuring satisfaction with certain motivation strategies and the job itself. The task of the
respondents, regarding the questions referring to measuring the satisfaction with certain motivation
strategies and the job itself , was to mark their satisfaction level ranging from 1 (very dissatisfied) to 5
(very satisfied) on scale offered. Questions were designed to adequately cover different types of
factors which are relevant for job satisfaction.

Respondents' structure and data analysis


The healthcare institution where the survey was conducted employs more than 800 employees, 137 of
them successfully completed the survey.

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Table 2 represents the structure of the respondents. The total number of respondents who had finished
the questionnaire successfully was 137 out of which 96 were female (70,1%) and 41 were male
(29,9%).

Table 2: Respondents by sex


Number of %
respondents
Male 41 29,9
Female 96 70,1
TOTAL 137 100,0

Figure 3: Graphical representation of employees by sex

Male
Female

The age structure of the respondents who completed the survey is presented in Table 3, where it is
apparent that the staff is relatively young because 56.3% of the employees is in age category 36-45
and only 4.3% of the employees are over 46.

Table 3: Respondents by age


Number of %
respondents
20-25 12 8,7
26-35 42 30,7
36-45 77 56,3
46 and more 6 4,3
Total 137 100,0

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Figure 4: Graphical representation of employees by age

60

50

40

30

20

10

0
20-25 26-35 36-45 46 and more

More than 63,4 % of employees who had finished the questionnaire successfully were those with
higher qualification (college graduates), 29,1 % were those with secondary qualification (high school
graduates) and 7,5 % were those with elementary qualification.

Figure 5: Graphical representation of employees by professional education

Elementary school

High school graduates

College graduates

0 10 20 30 40 50 60 70

College graduate employees with completed high school qualifications, in the health care institution
were the survey was distributed, point out the highest average grade for the motivational strategy
„interesting and challenging job“, while the lowest grade is recorded with „good interpersonal
relationships“.

Table 4: Average grade of different motivation strategies for the college graduate employees
MOTIVATIONAL STRATEGY AVERAGE GRADE
Progress possibility 4,2
Appropriate financial compensations 3,8
Interesting and challenging job 3,6
Good interpersonal relationships 3,2
Praises and acknowledgments 2,9
Acceptance and appreciation at work 2,7

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Respondents with higher qualification (college graduates), evaluate motivational strategy „progress
possibility„ and highest average grade (4,2). With average grade 3,8 they evaluate „appropriate
financial compensation“ as a second best motivational strategy and with the lowest average grade they
evaluate „acceptance and appreciation at work“.

Table 5: Average grade of different motivation strategies for the secondary qualification (high school
graduates) employees
MOTIVATIONAL STRATEGY AVERAGE GRADE
Interesting and challenging job 3,9
Progress possibility 3,6
Acceptance and appreciation at work 3,1
Appropriate financial compensations 2,9
Good interpersonal relationships 2,4
Praises and acknowledgments 2,1

Table 6: Average grade of different motivational strategies for employees with completed elementary
school
MOTIVATIONAL STRATEGY AVERAGE GRADE
Appropriate financial compensations 4,7
Progress possibility 4,4
Acceptance and appreciation at work 3,9
Praises and acknowledgments 3,5
Good interpersonal relationships 3,3
Interesting and challenging job 2,6

Employees with completed elementary school evaluate the appropriate financial compensation as the
best motivation strategy with an average score of 4.7, and as the worst strategy of motivation they
evaluate an interesting and challenging job.

Based on the above, we can conclude that with the highest average satisfaction with material
compensations indicate employees with elementary school. The same motivational strategy is also
very important for high school graduates.

Table 7: Level of job satisfaction employees with different degrees of education


Nb. QUALIFICATION AVERAGE
GRADE

1 college graduates 4,2


2 high school 3,9
graduates
3 elementary school 3,5

Using Pearson's correlation coefficient, we have compared the satisfaction between material
compensation and job satisfaction and between job satisfaction and interpersonal relationships, and the
progress possibility and job satisfaction.

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Table 8: Correlations between material compensations, interpersonal relationships, the ability to
progress and job satisfaction of respondents at a health institution (in total number)
Nb. MOTIVATIONAL STRATEGY PEARSON'S CORRELATION
CORRELATION COEFFICIENT
COEFFICIENT

1 Material compensations 0.911 Strong


2 Interpersonal relationships 0.232 Weak
3 Progress possibility 0.699 Moderate

Based on the data processed, we can conclude that when we observe the employees in the total number
and not looking the gender and the level of the qualification, interpersonal relations have a slight
correlation with satisfactory work. Medium strong correlation is present between the progress
possibility and job satisfaction, while the strong connection represents material compensation with
satisfaction with work.

7. Conclusion

Fast and constant changes in the economic and social environment require a fast and continuous
adjustment to the new market conditions. Because of it in order for higher competitiveness, better
satisfaction of customer needs and survival in the business environment, organizations must constantly
monitor their business processes and introduce new ones. In doing so organizations must use different
concepts, methods and tools. One of the most important elements of survival support, organizational
development, and customer satisfaction is an adequate linkage between organizational management
and employees' reward system.

Motivation, rewarding, education, training and improvement of employees and thus gaining new and
expanding existing knowledge and skills are the most important areas of leadership actions for the
effectiveness and efficiency of employees. Employees represent creators of new technical,
technological and organizational solutions; creators of new values and relationships; managers of the
workflow and organizational development.

It is a duty of manager through the understanding of the complexity of human nature, depending on
specific circumstances, to choose and apply appropriate reward systems, motivational techniques that
will ensure the desirable behavior of employees and the achievement of their own as well as the
objectives and tasks of the organization. It is particularly important that leadership knows the level of
motivation and satisfaction of employees at each workplace well as well as their expectations in terms
of workplace, in order to have an impact on improving job engagement when applying the adequate
models. In this context, the management must pay attention to the gender structure of the employees as
well as the age and professional qualifications of the employees because it is essential to distinguish
the employees in these categories as well as not to create a big gap between these categories.

The research has confirmed the assumption that on total work satisfaction material compensation has
the biggest influence and on interpersonal relationships it has little influence. By analyzing the results
we came to the conclusion that this correlation can be confirmed also with the employees with the
lowest qualifications which justifies the assumption that their satisfaction in financial terms is greater
compared to the praise and recognition in the organization. In the analysis of data we also came to the
conclusion that the strongest motivational strategy of those with higher qualifications is "interesting
and challenging job", which again justifies the assumption that employees with higher education are

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striving for greater challenges to confirm their acquired knowledge and through this they see their
satisfaction with job.

Job satisfaction is related with the work content, the physical and social working conditions (quality of
interpersonal relationships, leadership style, the relationship between management and employees) and
certainly with the personality of employees, their abilities, emotions, etc. All these facts represent the
basis for building a quality and long-term reward system in which both employees and the leader will
achieve their goals, be motivated and satisfied, and which are basically intertwined and whose
accomplishment is not individually possible, but together they make up a whole.

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